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Yahoo was founded by Jerry Yang and David Filo in January 1994 and was an early pioneer in the dotcom boom, but was quickly overhauled by Google and others. In 2008, it rejected a US$44.6 billion bid from Microsoft, and subsequently Yahoo’s market capitalisation slipped to just US$22.24 billion just three years later.

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Yahoo chief calls for return to workstations

Employees working from home told to report to offices but the move may have risks

Yahoo chief Marissa Mayer has told staff working from home to return to the company's offices. Photo: Reuters

Yahoo chief executive Marissa Mayer, by ordering staff to report to offices, risks losing the productivity gains that can come from flexible work arrangements and jeopardising her ability to lure top talent.

Jackie Reses, Yahoo's executive vice-president of people and development, sent a memorandum last week asking employees with work-from-home arrangements to make their way to the offices, starting from June.

"To become the absolute best place to work, communication and collaboration will be important, so we need to be working side by side," said the memorandum, whose contents were confirmed by a Yahoo employee who asked not to be identified because it was not a public document. "Speed and quality are often sacrificed when we work from home."

At a time when Mayer is under pressure to jump-start growth and create innovative products, the shift may compromise Yahoo's ability to attract employees seeking the freedom to work outside the office - a perk offered by many of the company's competitors.

Research suggested that working from home enhanced productivity, said Jody Thompson, co-founder of workforce consultant CultureRx. "Mayer has taken a giant leap backward," Thompson said. "Instead of keeping great talent, she is going to find herself with a workplace full of people who are good at showing up and putting in time."

Yahoo spokeswoman Sara Gorman declined to comment on the memorandum or discuss the company's internal policies.

This seems a backwards step in an age when remote working is easier and more effective than ever

People who worked from home tended to have less stress and were more productive, partly because they did not invest time and money in commuting, said Brad Harrington, executive director of the Boston College Centre for Work and Family. "When employees have family or other personal issues they need to take care of, the feeling is that by being able to work from home, you can take care of those in a much shorter period of time than commuting," he said.

The portion of US workers who performed their job at least one day a week at home increased to 9.5 per cent in 2010 from 7 per cent in 1997, according to the US Census Bureau.

In a study of call-centre employees of a Chinese travel agency, researchers at Stanford University found a 13 per cent performance increase for staff who worked from home.

Mayer, who last year became Yahoo's fifth chief executive in four years, worked from her California home in October in the weeks following the birth of her first child.

Richard Branson, founder of Virgin Group, said in a blog post yesterday that Mayer's decision ignored the advancements of mobile and video technology that had helped workers do their jobs whatever the location.

"This seems a backwards step in an age when remote working is easier and more effective than ever," Branson wrote in the post. "If you provide the right technology to keep in touch, maintain regular communication and get the right balance between remote and office working, people will be motivated to work responsibly, quickly and with high quality."

Mayer earned the support of some analysts and investors in January after reporting the company's first annual sales increase in four years. Her changes would continue to be supported as long as she kept delivering results, said Colin Gillis, an analyst at BGC Partners.

"She needs to rebuild the culture of this company, and she needs to drive revenue growth," Gillis said. "The whole notion of ending remote working, and whether it's right or wrong, it's her prerogative as CEO, and we'll see if that helps her with those first two goals."

This article appeared in the South China Morning Post print edition as Yahoo chief calls for return to workstations